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Fair points. I played RNG on retail but only post-adjustment, and I don't have RNG leveled here but I feel like it should be changed so that only the ranged attack damage is effected by distance. If you're missing it's a problem. If you're doing 10% less damage because you're not in optimal range -- that's not so bad.
I feel this is a very good point by Therin.
As I understand it from the live-stream, Nasomi was worried his Melee TP correction would overly favour RNG and make it OP so added the optimal range mechanic as a solution (forcing you out of range of Melee). I don't think he thought through the impact on endgame or any content outside of XP party.
Amending the formula so you do less damage close by but don't suffer an accuracy penalty (particularly on WS) feels like a Nasomi compromise that might come down the line.